European Union

The EU and the United States have the world's largest bilateral trade relationship. The EU was the United States' largest trading partner in terms of total trade, the largest source of U.S. imports, and second only to Canada as a destination for U.S. exports in 2006.

The U.S. trade deficit with the EU decreased by 5 percent to $132.8 billion in 2006, after reaching a 5 year high in 2005. The U.S. trade deficit with the EU is the second largest after the deficit with China.

The largest absolute increases in U.S. exports to the EU in 2006 were in the transportation equipment, chemicals and related products, and minerals and metals sectors.

U.S. exports of motor vehicles to the EU increased by $4.3 billion in 2006, of which $3.1 billion was exports to Germany. U.S. exports of aircraft, spacecraft, and related equipment to the EU increased by 17 percent to $15.8 billion, mostly due to flight route expansion and fleet replacement needs.

Precious metals and non-numismatic coin shipments from the United States to the EU more than doubled, to $5.6 billion in 2006. Rising prices were a key factor contributing to this increase, as was the export of precious metals to the United Kingdom for trade on global exchanges.

Exports of petroleum products to the EU also more than doubled to $4.3 billion in 2006. The increase is price-related, as U.S. exports increased by less than 1 percent in quantity terms.

The largest absolute increases in U.S. imports from the EU in 2006 were in the chemicals and related products, energy-related products, minerals and metals, and machinery sectors. Petroleum product imports from the EU rose by 25 percent to $21.2 billion in 2006 while U.S. imports of crude petroleum fell by 54 percent to $1.3 billion, primarily because of a temporary shutdown of wells in the North Sea (Norway and the United Kingdom) for repair.

U.S. imports of aircraft, spacecraft, and related equipment; and aircraft engines and gas turbines both increased significantly in 2006. U.S. imports of aircraft, spacecraft, and related equipment were principally large civil aircraft. U.S. imports of aircraft engines and parts grew because of a strong increase in the production of U.S. aircraft.